FSL-9 PTE Ltd and another v Norwegian Hull Club

Practice – Pre-trial or post-judgment relief. The Commercial Court granted summary judgment to the defendant P&I Club (the Club) in respect of an issue of construction of a letter of undertaking (LOU), which the charters' Club had granted to the owners of a vessel that had been damaged in Indonesia. The owners argued that, on the true construction of the LOU, if they were under-secured, they were at liberty to apply to the court to require the Club to increase the level of security available under the LOU. The court ruled that the words 'liberty to apply' in the LOU did not give owners the right to apply to the court to require the Club to increase the amount of its undertaking. The provision enabled the owners to arrest the charterers' assets if the security provided proved to be inadequate, notwithstanding the prohibition against arrest or re-arrest provided for earlier in the instrument. Further, the right to enforce an increase in the amount of the security lay against the charterers, and not against the Club directly.

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